To operate a daycare in the City of Davenport one must obtain a special use permit from the Zoning Board of Adjustment (ZBA). In March 2014, the ZBA granted Tiny Tots Learning Center a permit. Tiny Tots closed its doors in late 2014, and in July 2016 a new lessee of the premises, Mz Annie-Ru Daycare Center, opened at the same location. The new day care center supervises more children and is open for longer hours than Tiny Tots was. The Davenport Zoning Administrator determined the special use permit issued to Tiny Tots “run[s] with the land” and the new daycare center would not need to obtain another special use permit.

Burroughs along with other neighbors disagreed and appealed that decision to the Board of Adjustment. On October 13 the ZBA voted 4-0 to uphold the administrator’s decision that the special use permit continued to apply. After that hearing, staff advised the residents that they could file a petition to revoke the special use permit. They did so and on December 8 the board held a public hearing to determine if the permit should be revoked. The BOA voted 0-4 against revoking the permit. Shortly after both of these meetings city staff posted unofficial minutes to the city’s website; however, they were not officially approved until the subsequent meeting of the ZBA.

On January 25, Burroughs along with five other residents appealed these decisions to District Court claiming that the ZBA had acted improperly in refusing to revoke the permit. The City filed a motion to dismiss the case, asserting that the petition was untimely because it was not filed within thirty days of the challenged decisions.

Iowa Code 414.15 states:

Any person […] aggrieved by any decision of the board of adjustment […] may present to a court of record a petition […] Such petition shall be presented to the court within thirty days after the filing of the decision in the office of the board.

The district court granted the City’s motion. Considering the posting of the minutes online to be the “filing of the decision.” Because the minutes of the December 8 meeting were posted on December 19th. The appeal on January 25th was untimely.

The court concluded that the:

“thirty-day time period begins to run from the time the appealing party has either actual knowledge or is chargeable with knowledge of the decision to be appealed.” Because it was “undisputed” that plaintiffs attended both the October 13 and the December 8 meetings, they had actual knowledge of the Board’s decisions as of those dates: “[T]he Court cannot hold that they did not have actual knowledge or chargeable knowledge of the decision which they witnessed firsthand.”

Burroughs and the other plaintiffs appealed this dismissal.

The Iowa Supreme Court considered four possibilities of when the decision was “filed” in this case:

The time that the decision is made in a public meeting wherein the parties gain “actionable knowledge.”

When the unofficial minutes of the meeting are posted to the city websites.

When approved official minutes have been posted online.

When a signed physical document is present in the offices of the BOA and available for public inspection.

Both parties had an initial and fallback opinion. The city argued that the decision was “filed” at the meeting when the vote was taken and the parties were aware of the action. If that was not accepted, then they argued that the posting of the unofficial meeting minutes online should be considered filing the decision.

The plaintiffs argued principally that that for a decision to be filed it had to be a physical signed document including findings of fact and available for public inspection at the board’s offices. By this argument neither the October 13th decision nor the December 8th decisions had ever been properly filed and thus could still be appealed. If the court did not accept this argument, then they argued that only the posting of the approved minutes online could be considered “filing.” This fallback position would only preserve the December 8th refusal to revoke the permit for appeal as the approved minutes containing that decision were not posted until January 6th.

The court gave a few principles that can be used to determine when a ZBA decision has been filed and, therefore, how long plaintiffs have to appeal.

First, a decision cannot be simply oral. It must exist in some documentary form. Simply having knowledge of what the decision is is not sufficient.

Second, the decision can be filed in electronic rather than paper form. The plaintiffs in this case tried to argue that a public document must be physical. The court disagreed indicating that in fact most of the Court’s own documents exist only digitally.

Third, a document has been filed in the “office of the board” when it has been posted on the board’s publicly available website that the board uses as a repository for official documents. The “office of the board” does not have to be a single physical location as long as the documents are accessible to the public.

Finally, the thirty-day period is triggered when the board posts the decision on its public website. However, what is posted must be an actual decision. Proposed minutes that have not yet been approved do not constitute a decision, but approved minutes do.

The Supreme Court of Iowa reversed the District Court’s dismissal of the December 8th ZBA decision. The case is remanded back to district court for further proceedings on the legality of that decision.

Frank Ogden owns and operates a nonconforming mobile home park on the south side of Des Moines. The property consists of a narrow u-shaped access road with mobile homes around the interior and exterior of this road. The historical record is not clear, but its use as a mobile home park dates back to some time between 1947 and 1955. In 1953 the Des Moines zoning ordinance was modified prohibiting mobile home parks in the R-2 zone in place on the property. In 1955, the owner of the property obtained a certificate of occupancy for the operation of a mobile home park. That certificate of occupancy indicates that the mobile home park was a nonconforming use as to the R-2 zone.

The best record documenting historical use is an aerial photograph from 1963. The photograph depicts “thirty-nine concrete pads with mobile homes situated on them in close proximity to one another. The photograph also shows that some of the homes had additional structures attached to them.” More recent photographs of the property reveal that some residents have added porches, decks, and more living space to their mobile homes.

The city did not issue any warnings or citations regarding the use of the property as a mobile home park until 2014. In 2014, a zoning administrator notified Ogden by letter of numerous violations of the 1955 Des Moines Municipal Code, under which the original certificate of occupancy had been awarded. These included setback violations, failure to maintain the access road, and additions to trailers among other issues. The letter also warned that the park’s violations posed a threat to the health and safety of the occupants.

Ogden did not take any action to remedy the violations. In October 2014, the city sought an injunction to close the park for the above listed violations. At trial the Des Moines Fire Marshall testified that the proximity of the mobile homes and the narrow access road created potentially dangerous conditions for residents.

The trial court found that the issuance of the occupancy permit in 1955 is proof that the property was in compliance with the above regulations when the nonconforming use was established. The court held further that the certificate of occupancy should be revoked as the park poses a threat to “the safety of life or property”.

Ogden appealed to the Iowa Court of Appeals. The Iowa Court of Appeals found that the park had:

grown within its borders in the numbers and location of structures attached to the mobile homes resulting in a narrowing of open space on the roadways and between the homes. […] these changes over a half century have enhanced and intensified the non-conforming use to the point where it is a danger to life and property. […] Ogden’s use of the property is not a lawful intensification of an existing nonconforming use. The present congestion and crowding between structures and narrowing the roadway changes the nature and character of the 1955 non-conforming use and presents a danger to residents and neighbors of the park.

The appeals court affirmed the grant of the city’s request for an injunction against Ogden’s use of the property as a mobile home park. One judge dissented. Read more about that decision here.

Ogden appealed to the Iowa Supreme Court arguing several points:

The actions of the City to enjoin his use of the mobile home park amount to an unconstitutional taking.

It is not necessary for Ogden to discontinue his legal nonconforming use of the property as a mobile home park for the safety of life and property.

The changes to the property did not expand his legal nonconforming use of the property beyond its authorized nonconforming use.

The doctrine of equitable estoppel bars the City from seeking to enjoin his use of the property as a mobile home park.

The district court erred by excluding the testimony of a resident of the mobile home park.

Unconstitutional Takings Because Ogden did not plead a defense on the basis of a taking at the district court level he waived his unconstitutional takings claim. The claim was not preserved. Iowa Supreme Court therefore did not rule on any regulatory takings claims.

Nonconforming Use The court began by citing its definition of a legal nonconforming use.

A nonconforming use is one “that lawfully existed prior to the time a zoning ordinance was enacted or changed, and continues after the enactment of the ordinance even though the use fails to comply with the restrictions of the ordinance.” City of Okoboji v. Okoboji Barz , Inc. […] (Iowa 2008) .

Discontinuance of nonconforming use for the safety of life or property For a city to obtain an injunction requiring compliance with a zoning ordinance it must establish (1) an invasion or threatened invasion of a right, (2) that substantial injury or damages will result unless the request for an injunction is granted; and (3) that there is no adequate legal remedy available.

The Iowa Supreme Court found that the City of Des Moines did not meet this burden. Apart from the testimony of the fire marshal during trial, the city offered little evidence of unsafe conditions on the property. The city had also never cited the property for violations of the fire code, and the first letter of notice of a zoning violation was not sent until 2014.

Nonconforming Use Defense In the case of an established nonconforming use, the burden lies on the city to prove that use exceeds the prior established use. Property owners have some latitude to change their nonconforming use if those changes are not substantial and do not have adverse effects on the neighborhood. In this case, changes are compared to the state of the part when the certificate of occupancy was issued in 1955. Unfortunately there is no evidence as to the state of the park until the areal photograph from 1963. The City of Des Moines argues that the park must have been in compliance with setbacks and other regulations in 1955 otherwise the certificate would not have been granted. All of the violations visible in the 1963 areal photograph would have occurred between 1955 and 1963. The court finds this argument unpersuasive especially given the fact that the park was not cited for any zoning violations until 2014.

Taking the 1963 photograph as the best approximation of the nonconforming use recognized by the city in 1955. The number and location of the homes is similar to those located on the property today. The court notes that there are in fact less homes in the mobile home park today. The use of the property as a mobile home park today is then not “substantially or entirely different” from its original nonconforming use and is a protected legal nonconforming use.

Ogden’s Additional Claims Because the court found that Ogden’s use of the property as a mobile home park is a legal nonconforming use. The Court did not address equitable estoppel or the exclusion of the testimony of a resident.

The Iowa Supreme Court vacated the decision of the court of appeals and reversed the judgment of the district court. Ogden may continue his nonconforming use of the property as a mobile home park.

Residents who live near Grain Processing Corporation’s (GPC) corn wet milling plant in Muscatine brought an action for nuisance, trespass and negligence against GPC for its manner of operation of the plant and the resulting “haze, odor, and smoke” emanating from the plant. The residents moved to treat the claim as a class action suit on behalf of all residents suffering the effects of the plant’s operation. GPC resisted the motion to certify the case as a class action, arguing that the claims of the residents were “inherently individual, and as such, individual issues predominated over those common to the class.” The district court granted class certification. Noting its authority to modify or decertify the class at any time, the court divided the class into two subclasses: one for members in close proximity to GPC, and the other for those in peripheral proximity. GPC appealed. Certification of the class action suit was the sole issue before the Iowa Supreme Court (in an earlier case, posted here, these same parties litigated the applicability of the Clean Air Act to local claims for nuisance).

Under Iowa Rules of Civil Procedure 1.261 – 1.263 a district court may certify a class action if “the class is so numerous…that joinder of all members…is impracticable” and “there is a question of law or fact common to the class.” In addition, a class action should be permitted for the “fair and efficient adjudication of the controversy” and “the representative parties fairly and adequately will protect the interests of the class.” The Court of Appeals first noted that caselaw requires that “a failure of proof on any one of the prerequisites is fatal to class certification,” but also that, at this stage, “the proponent’s burden is light.” The Court of Appeals does not review the decision to certify the class itself, but simply whether the district court abused its discretion in doing so.

GPC argued that the district court erred because the requirement of commonality was not met, and that in this case individual issues predominate over common questions of law or fact.

Commonality. It is not sufficient that class members have all suffered a violation of the same provision of law. Rather, claims must depend on a common contention of an issue that central to the validity of each one of the claims. GPC argued that the named plaintiffs did not suffer the same injury of other class members; particularly in the types of harm suffered and the degree of proof needed to prove causation. The district court initially agreed, noting that two of the plaintiffs –the one closest to GPC and the one furthest – suffered significantly different “concentration totals” of particulates tested in the air. The Court resolved this disparity, however, by creating the two subclasses and grouping the plaintiffs accordingly. Thus the plaintiffs within each subclass had identified common questions of extensiveness of emissions, what caused them, what precautions were taken, and economic impact.

Predominance. A common question does not end the inquiry. Courts consider class actions appropriate “only where class members have common complaints that can be presented by designated representatives in the unified proceeding.” It “necessitates a close look at the difficulties likely to be encountered in the management of a class action.” The district court spent considerable time addressing the predominance question in its ruling. It concluded “While variations in the individual damage claims are likely to occur and other sources of emissions may pose unusual difficulties, common questions of law and fact regarding defendant’s liability predominate over questions affecting only individual class members such that the subclasses should be permitted for the fair and efficient adjudication of the controversy.” After going through the standards of proof for negligence, trespass, and nuisance claims, the Court of Appeals agreed with the district court that common questions of law, with common evidentiary findings required of each, will predominate the action, and that therefore class action treatment is appropriate.

This is an older case, a classic of Iowa planning and zoning case law. However, the issue of the role of the zoning board of adjustment is one that still comes up quite frequently.

In the late 1990s Wal-Mart began planning a new location in Decorah, Iowa. The location selected was located in the floodplain of the Upper Iowa River. To build there, Wal-Mart had to place fill in the floodplain. First, Wal-Mart obtained the required permits from the Iowa Department of Natural Resources. Then, Wal-Mart applied to the Decorah City Council for a permit to place fill on the floodplain. The city’s zoning code contained among its permitted uses in the F-1 floodplain district:

Dumping of approved materials for landfill purposes, subject to prior approval of the city council and appropriate state agencies. [emphasis added]

Following this section of city code, Walmart’s representatives appeared before the city council on August 15, 2000 and requested approval to fill the property. After a heated and confrontational public comment period, the city council approved the request by a vote of four to three. The council’s vote was only to approve the fill. It did not change the zoning of the area or approve of a site plan.

Previously, Upper Iowa Marine, which owns adjacent land, had attempted to dump fill in the floodplain. They also applied for and obtained the proper permits from the Iowa Department of Natural Resources. Instead of presenting their request to the city council. They applied for a special exception to the zoning ordinance from the zoning board of adjustment. The board of adjustment found the application inconsistent with the comprehensive plan and denied the request.

A group of citizens in Decorah filed suit, arguing that Wal-Mart’s request should have been submitted to the board of adjustment as Upper Iowa Marine had done rather than the city council.

The case hinges on two main issues (1) the authority of the board of adjustment and the city council and (2) definition of a special use.

Iowa Code 414.7 states that a city council should appoint a board of adjustment so that it, “may in appropriate cases and subject to appropriate conditions and safeguards make special exceptions to the terms of the ordinances…”

Further on in 414.12 Iowa Code defines the powers of the board of adjustment including, “to hear and decide special exceptions to the terms of the ordinance…”

Courts in Iowa have been very clear that no other entity has this power. In The City of Des Moines v. Lohner in 1969 the court said that the power to make special exceptions are “placed exclusively in the board [of adjustment] and effectively restricted by statute.” Likewise in Depue v. City of Clinton in 1968 the court asked itself, “[I]s the jurisdiction of the board of adjustment, conferred by sections 414.7 and 414.12 and exclusive jurisdiction? We think the answer[ is] affirmative.”

It is clear then in Iowa case law that approving special uses is the exclusive jurisdiction of the board of adjustment. At issue is whether conditioning a permitted use on “prior approval of the city council” was essentially the same as a permitted use. Wal-Mart argued that the council’s grant of permission was not a special exemption because it was listed as a permitted use and the council had only a “limited, technical review.” Walmart argued that the city council was not examining whether the proposed change was consistent with the city’s comprehensive plan. Instead they were simply ensuring that the appropriate permit had been obtained from the Department of Natural Resources and that the fill material was free from waste materials.

In its reasoning, the court took special note of the contested nature of the public discussion period before the vote at the council meeting. During this meeting evidence and opinions were presented on both sides and one council member even attempted unsuccessfully to convene a task force to study the issue further.

The issuance of special-use permits is quasi-judicial or administrative. […] The problems with allowing a political, legislative body such as a city council to rule on applications of this nature (in addition to lacking statutory authority) are apparent in this case. The city council had no hearing procedures, notice requirements, or the type of guidelines that would govern the board of adjustment.

Even on the cold minutes of the meeting, it is apparent the council would have known by the time the discussion was concluded, if they did not already know, they had a tiger by the tail. The residents were deeply divided on the issue, raising concerns about the environmental impact, the fairness of the proceedings (especially in view of the fact the board of adjustment had denied a similar permit), and the prospect of 120,000 cubic yards of fill being placed in the floodplain in the event the DNR appeal was successful or the construction plans were thwarted for some other reason.

In the end, the court concluded that whether or not dumping fill in the floodplain was a special or conditional use in Decorah’s code, the city council’s actions violated state code.

If it was a special use, is clear that the city council had no authority to allow it. Even if it is not, however, it would violate chapter 414 of Iowa Code which requires that zoning be done “in accordance with the comprehensive plan.” In fact, Decorah’s comprehensive plan expressly addresses protecting its floodplains as natural resources “for use as permanent open space.” In making a decision in direct opposition to the comprehensive plan, the application of the ordinance would still be illegal.

Historical Note:

Walmart had already completed construction on the $20 million building that their superstore would occupy at the time of this decision. The building had been sitting vacant since the previous fall awaiting the outcome of this lawsuit. Eventually, the parties settled. Wal-Mart agreed to make a donation to the Decorah library and to fund a study of the floodplain. Wal-Mart also agreed to lease their old building the the city for $1 a year with all proceeds from subleases going to fund the construction of a river trail. The Wal-Mart, much like confusion over roles in planning and zoning, is still with us today.

The Dyersville City Council voted to rezone the area containing the site of the 1989 movie Field of Dreams from A-1 Agricultural to C-2 Commercial in order to facilitate the development of a a 24-field baseball and softball complex, along with the farmhouse and original baseball field used for the movie which would continue to be maintained as a tourist attraction. Community members filed two writs of certiorari to challenge the rezoning on a number of grounds. The District Court annulled the writs and found in favor of the city council. This appeal followed. The Iowa Supreme Court engaged in a 20-page recitation of the facts of the case on its way to its 44-page decision. Only those relevant to the outcome of each challenge will be repeated here.

Quasi-judicial vs. legislative action. The petitioners argued that the city council’s actions were quasi-judicial in nature rather than legislative, and therefore the council should have been required to conduct a more formal fact-finding proceeding and make findings of fact in support of its decision. Quasi-judicial proceedings are also subject to greater judicial scrutiny when reviewed by an appellate court. Petitioners relied on the Iowa Supreme Court’s decision in Sutton v. Dubuque City Council in support of their position. In contrast, the city council maintained that the action of a legislative body in rezoning land is legislative in nature, which gives the legislative body wider latitude in the conduct of the proceedings. Courts also give greater deference to legislative decisions made by city councils and county boards of supervisors.

In ruling on this issue the Iowa Supreme Court reviewed Sutton and several other past cases. It recognized that in its Sutton decision the Court set forth three factors in determining whether zoning activities are quasi-judicial (versus legislative) in nature (1) [when the rezoning] occurs in response to a citizen application followed by a statutorily mandated public hearing; (2) [when] as a result of such applications, readily identifiable proponents and opponents weigh in on the process; and (3) the decision is localized in its application affecting a particular group of citizens more acutely than the public at large. Recognizing that the Court “cited these factors with approval” in Sutton, it noted that at the time it chose not to hold that all public zoning hearings should be classified as adjudicatory. It stated:

The Sutton Case dealt with a different situation than many of our previous zoning cases because it involved PUD zoning. We noted the ‘quasi-judicial character of municipal rezoning is particularly evident in matters involving PUD zoning.’ We discussed the distinction between traditional rezoning and PUD zoning:

Creating zoning districts and rezoning land are legislative actions, and…trial courts are not permitted to sit as ‘super zoning boards’ and overturn a board’s legislative efforts….The [PUD] concept varies from the traditional concept of zoning classifications. It permits a flexible approach to the regulation of land uses. Compliance must be measured against certain stated standards….Since the board was called upon to review an interpretation and application of a n ordinance…and the ordinance was not challenged per se, the board’s decision was ‘clearly quasi-judicial’.

Rather than follow Sutton, the Court found the present case to be “much more analogous” to the case of Montgomery v. Bremer County Board of Supervisors. In Montgomery, the county Board rezoned two parcels of land from agricultural to industrial after two rezoning petitions were filed. In Montgomery, the Court found that the zoning decision of the supervisors was “an exercise of its delegated police power,” and held that “the generally limited scope of review applicable to the case [was] to determine whether the decision by the Board to rezone [was] fairly debatable.” In making the analogy, the Court observed:

The city council [in the present case] was acting in a legislative function in furtherance of its delegated police powers. The council was not sitting ‘to determine adjudicative facts to decide the legal rights, privileges or duties of a particular party based on that party’s particular circumstances. The [decision] was not undertaken to weigh the legal rights of one party (the All-Star Ballpark Heaven) versus another party (the petitioners). The council weighed all of the information, reports, and comments available to it in order to determine whether rezoning was in the best interest of the city as a whole.

The Court held that the proper standard of review “in this case is the generally limited scope of review” utilized to “determine whether the decision…is fairly debatable.” A decision is “fairly debatable” when “reasonable minds may differ, or where the evidence provides a basis for a fair difference of opinion as to its application to a particular property.” If a rezoning decision is “fairly debatable” then a court will decline to substitute its judgment for that of the city council or board of supervisors.

Impartiality of the city council. The Court noted that, while it was true that several council members viewed the rezoning and the project as an opportunity for the city, each council member attended all meetings, read reports, listened to citizens speak for and against the project, asked questions, and investigated issues and concerns. Nothing in the record demonstrated that any council member had any conflict of interest. Several members participated in an economic development bus trip to Des Moines to discuss the project with legislators and state officials, but the Court found that mere participation in such activities for the potential benefit of the city does not establish partiality or bias. “Rather, this is more akin to the council members upholding their public duty by performing their due diligence in determining what state aid might be available to help with the project before any formal action was taken. The council make its decision based on what it believed was best for the community after a full and open discussion of the issues over many months.”

Decision was arbitrary, capricious, unreasonable. A decision is arbitrary, capricious, or unreasonable when it is not authorized by statute, or is unsupported by the facts. For the reasons cited above, the Court declined to find in favor of the petitioners on these grounds.

Inconsistent with comprehensive plan. Under Iowa Code 414.3, zoning regulations “shall be made in accordance with a comprehensive plan.” The Court referred to its prior decision in Iowa Coal Mining Co. v. Monroe County for the principle that “compliance with the comprehensive plan requirement merely means that the zoning authorities have given ‘full consideration the problem presented, including the needs of the public, changing conditions, and the similarity of other land in the same area.'” The Court referred to the boilerplate language found in every plan that says rezonings should be made with consideration of the unique character of the area, the suitability of the land for the proposed use, the conservation of buildings or value, and the encouragement of the most appropriate use of the land. It noted that the Field of Dreams site is a unique parcel of land, and that the council considered the distinctiveness of the land and whether the proposed rezoning would be the best use of the site for the benefit of the community as a whole. The city’s community builder plan also specifically addresses the importance of preserving the site in order to maintain and increase tourism.

Illegal spot zoning. To determine whether illegal spot zoning has occurred, a court must consider (1) whether the new zoning is germane to an object within the police power; (2) whether there is a reasonable basis for making a distinction between the spot zoned land and the surrounding property; and (3) whether the rezoning is consistent with the comprehensive plan. Noting again the uniqueness of the Field of Dreams site, the Court refused to find this to be a case of illegal spot zoning even though the result is an island of commercial development surrounded by agriculturally zoned properties.

200-foot buffer zone. Under Iowa Code 414.5, if 20% or more of the landowners immediately adjacent to the property proposed to be rezoned protest the change, then the city council must approve the rezoning by a four-fifths vote. The rezoning applicants left out of the rezoning request a 200-foot buffer zone along the three sides of the perimeter of the property (leaving it as A-1 Agricultural). The petitioners challenged the use of this 200-foot buffer as a way to prevent nearby property owners from objecting to the project and thereby triggering the requirement of a unanimous vote. While the Court acknowledged that “at first blush the buffer zone can appear to be unfair,” the Court concluded that the buffer in fact provides a benefit to adjacent landowners by addressing their expressed concerns about hunting and farming operations directly adjacent to the ballfields. The Court also noted that other courts have validated the use of buffer zones to avoid supermajority requirements. Regardless, even if the 200-foot buffer was improper, the rezoning was adopted by 4-1 vote of the city council.

Incorrect legal description. While the notice of the original ordinance (Ordinance 770) contained errors in the legal description, the council corrected the legal description in the ordinance that ultimately rezoned the property (Ordinance 777). No new notices were published, however, for Ordinance 777. The Court does not require complete accuracy when providing notice. Neither Iowa Code nor the city ordinances require the publication of a complete legal description. The purpose of the notice requirement is to give the public reasonable notice of the pending action. The public was well aware of the ongoing proceedings, and no one was confused or misled by the inaccuracy of the legal description.

Equal Protection. Petitioners argued that all neighboring landowners were similarly situated, yet the 3-sided 200-foot buffer prevented those neighbors along the buffer from exercising the same right to object as the neighbors along the side of the property without the buffer. The Court found that the council’s decision met the rational basis test required by the Equal Protection clause in this case. The buffers, as described above, served a legitimate purpose of protecting the neighboring properties on the three sides.

Due Process. Petitioners and the public in general were given adequate notice. Further, they were heard in multiple public hearings. All community members wishing to speak were allowed to do so.

Based on all preceding points, the Iowa Supreme Court affirmed the rezoning of the Field of Dreams property.

On March 4, 2014 the Warren County Board of Supervisors held a public meeting to unanimously approve an annual budget that included all county employees’ salaries, with raises. Before, during, and after that time, however, members of the Warren County Board of Supervisors met with the County Administrator individually to discuss a restructuring of county government, which included the termination of a number of employees. These meetings went as far back as January 2014. On March 25 and 26 the County Administrator, one Board member and the County Attorney met with each employee who was terminated to give them notice of the restructuring and offer them a severance package, the details of which had been worked out through the individual conversations between the County Administrator and the Board members.

On April 16 six employees who were eliminated brought suit the employees who were eliminated brought suit against the County, claiming that the Board, the County, and the individual supervisors violated Iowa’s Open Meeting Law. Then, on April 18 the Board provided notice for their next meeting which included consideration of the restructuring and the severance agreements. The meeting that day lasted about 20 minutes- the Board passed both resolutions and did not allow for public comment.

The Warren County District Court found that because a majority of the Board of Supervisors was never together in one place to discuss the restructuring, the Board did not explicitly violate Iowa’s open meetings law. The Board members had testified, however, that they understood the law and used the various one-on-one meetings between the Administrator and the individual supervisors to work around it. The terminated employees appealed to the Iowa Supreme Court.

The Supreme Court first reiterated that ambiguities regarding the Open Meetings Law (OML) should be resolved in favor of openness. To do so it found it necessary to resort to common law rules of “agency” to interpret OML. “To do otherwise would undermine the clear purpose of the statute.” After examining the common law, the Supreme Court determined that the relevant statutory definition of “meeting” in the OML should be effectively read to now say:

“all in-person gatherings at which there is deliberation upon any matter within the scope of the policy-making duties of a governmental body by a majority of its members, including in-person gatherings attended by a majority of the members by virtue of an agent or a proxy.”

Deliberation is the province of elected bodies. An elected body cannot use agents to deliberate. The Court was troubled by the use of the County Administrator to “conduct ‘shuttle diplomacy’ [which] worked so well they managed to implement the restructuring…without deliberating a single detail of the reorganization during a public meeting.”

The Supreme Court remanded the case back to the trial court in light of their revised interpretation of “meeting” in the OML. It directed the district court to determine whether an agency relationship legally existed between the County Administrator and one or more of the Supervisors.

Three justices dissented, raising the following points:

The decision could have unintended consequences for well-meaning government actors. It arguably overrules a 35-year old case in which the Iowa Supreme Court rejected the idea that serial phone conversations with less than a majority of a board could violate the open meeting law.

The Iowa legislature twice considered, but failed to pass, legislation that would have addressed serial gatherings of elected officials. This is evidence that they did not intend to include such gatherings within the meaning of the existing statute.

Other jurisdictions have “resoundingly rejected” the majority’s interpretation of a “meeting.”

The interpretation will chill necessary and appropriate private consultations by public officials that precede open meetings.

The majority’s new agency theory rests on a legal fiction that treats the county administrator as a supervisor.

Any two or more persons of full age, a majority of whom are citizens of the state, may organize themselves for the following or similar purposes: Ownership of residential, business property on a cooperative basis. A corporation is a person within the meaning of this chapter.

In May 2012 the Iowa City Board of Review sent notices to 18 properties indicating the board changed the classification for those properties from commercial to residential for property tax purposes. They were reclassified because they had been recently organized into multiple housing cooperatives. The City of Iowa City filed a notice of appeal with the district court, objecting to the Board’s reclassification. All parties agreed that two Iowa corporations organized each of the multiple housing cooperatives for the purpose of owning residential property in a cooperative. The City argued that the Board’s reclassification was improperly because (1) two natural persons, not two corporations, must organize multiple housing cooperatives under the Iowa Code, and that (2) the Iowa Code requires a one-apartment-unit-per-member ownership ratio for a multiple housing cooperative to be properly organized. The district court granted summary judgment in favor of the Board and the City appealed.

Need for natural persons to organize cooperatives. In Krupp v. Jasper County Board of Reviewthe Iowa Supreme Court held that the proper test for determining if a property could be classified as residential is whether the multiple housing cooperative was properly organized, not the actual use of the property. After examining the language of Section 499A.1(1) the Iowa Supreme Court concluded that a natural person need not be one of the organizers of a multiple housing cooperative. The phrases “persons of full age, a majority of whom are citizens of the state” and “a corporation is a person within the meaning of this chapter” are not inconsistent with each other. The Court said that “the intent of the General Assembly … was to put the same restrictions on corporate organizers as it did on persons who organized multiple housing cooperatives; [that is] the corporate organizers must have the authority to organize a multiple housing cooperative and a majority of the corporate organizers must be Iowa corporations. Had the General Assembly intended to adopt the City’s position…[it] would have said a corporation could organized a multiple housing cooperative only with two or more natural persons….”

One-apartment-unit-per-member ownership ratio. The City read Iowa Code 499A.11 to require this ratio. It reads in part

The cooperative has the right to purchase real estate for the purpose of erecting, owning, and operating apartment houses or apartment buildings. The interest of each individual member in the cooperative shall be evidenced by the issuance of a certificate of membership. The certificate of membership is coupled with a possessory interest in the real and personal property of the cooperative, entitling each member to a proprietary lease with the cooperative under which each member has an exclusive possessory interest in an apartment unit and a possessory interest in common with all other members in that portion of the cooperative’s real and personal property not constituting apartment units, and which creates a legal relationship of landlord and tenant between the cooperative and member. The certificate of membership shall be executed by the president of the cooperative and attested by its secretary in the name and in the behalf of the cooperative.

The Court stated that Section 499A.11 is not an organizational statute; rather Section 499A.1 is the statute that states the requirements that must be satisfied to organize as a multiple housing cooperative. The Court refused to glean a one-apartment-unit-per member ratio requirement from Section 499A.11, instead finding that it requires only a coupling of ownership and membership interests. “Put another way, while section 499A.11 certainly requires that each apartment be linked with a corresponding membership interest, there is nothing prohibiting one person from holding ownership and corresponding membership interest in more than one apartment unit.”

The Iowa Supreme Court affirmed judgment for the Iowa City Board of Review.

In two cases decided December 12, the Iowa Supreme Court addressed the scope of the implied warranty of workmanlike construction. This is a common law remedy developed by the courts “to protect an innocent home buyer by holding the experienced builder accountable for the quality of construction.” When introduced by the Iowa Supreme Court in 1985 as a “logical extension of the implied warranty of habitability for a tenant leasing a home.” The primary policy reason for these warranties is the “protection of innocent homeowners as consumers…to address the disparity in bargaining power between the consumer and the sophisticated builder-vendor.”

In Iowa, the elements of the implied warranty of workmanlike construction are:
(1) That the house was constructed to be occupied by the warrantee as a home;
(2) that the house was purchased from a builder-vendor, who had constructed it for the purpose of sale;
(3) that when sold, the house was not reasonably fit for its intended purpose or had not been constructed in a good and workmanlike manner;
(4) that, at the time of purchase, the buyer was unaware of the defect and had no reasonable means of discovering it; and
(5) that by reason of the defective condition the buyer suffered damages.

In Luana Savings Bank v. Pro-Build Holdings, Inc. and United Building Centers the Court was asked to extend the warranty to protect a bank that had acquired a mold-infested apartment complex by deed in lieu of foreclosure. Luna Savings Bank had financed the construction of two apartment buildings that, after a series of transactions, came to be owned by Shalom Rubashkin, an owner of Agriprocessors, Inc. in Postville, who was eventually indicted, convicted, and sentenced to prison for bank fraud and other financial and immigration crimes after the federal Immigration and Customs Enforcement raid on Agriprocessors in 2008. In June 2009 Rubashkin gave the bank a deed in lieu of foreclosure in satisfaction of the bank’s mortgage interest in the apartment complexes. It was then that the bank discovered substantial black mold in the apartments, resulting from improper installation of window and air conditioning units, and inadequate attic ventilation.

After determining that the bank’s claim failed the 5-part test set forth above, the court found that none of the policy justifications for the implied warranty of workmanlike construction justified extending it for the protection of lenders. A defective dwelling is not the same problem for a lender as it is for a home dweller. Furthermore, the lender has other ways of protecting itself in a transaction, and it is not the case that the lender is in an unequal bargaining position relative to the builder.

In Rosauer Corporation v. Sapp Development, LLC et al. the court refused the protections of the implied warranty to the purchaser of a residential lot without a home or other structure. In this case the plaintiff, a contractor-developer, bought a lot from a realtor to build townhomes for sale. The contractor alleged that the lot had improperly compacted backfill, requiring extensive additional work to get it ready for construction. Plaintiff sued the original developers whose contractor had performed the substandard soil work.

The court applied the 5 elements listed above, and found the plaintiff’s claim lacking in all respects. As in Luana Savings, the court then examined the policy justifications for the implied warranty of workmanlike construction and found that they did not demand the extension of its protection to this purchaser, who was in no way in a similar position to an innocent homebuyer.

The US Supreme Court has declined to hear Grain Processing Corporation’s appeal of the Iowa Supreme Court’s decision that neither the Federal Clean Air Act nor state emissions regulations preempt nuisance suits brought by neighbors complaining of the chemicals and particulate matter from the company’s facility in Muscatine. The original blogpost of the Iowa Supreme Court case is here.